Why the changing of the guard in Formula One is a marketing win

24 March 2017 2 min read

The departure of “overlord” Bernie Ecclestone gives way to a new era in which Formula One will embrace social media, provide value for brands and marketers, and become a fan favourite once again, writes Cameron Kelleher.

With the departure of Bernard Charles Ecclestone as the overlord of all things commercial in Formula One, and the arrival of Liberty Media as the new rights holders, the sport must now be set on a course of delivering greater returns for stakeholders and deepening fan engagement.

And the portents, ahead of the opening Grand Prix in Melbourne this week, are encouraging.

Evidence of the winds of change were to be found in the ‘live videos’ littering team and driver Twitter feeds during the recent 2017 pre-season testing in Barcelona. On Bernie’s watch, such practices were forbidden.

Bernie was allergic to social media – and F1 lagged behind the times as a result.

He was “not interested in tweeting, Facebook or whatever nonsense that is”. That brazen naivety will disappear under Liberty Media’s stewardship.

As it says on the tin, Liberty is in the media, communications and entertainment business. It has a vested interest in making hay from its $A10.3bn purchase via marketing means.

Liberty’s Steve Bratches, the new commercial sheriff in town, has already stated that the focus for Liberty will be on building the equity of the Formula One brand and has cited digital as a key component.

Bratches and Co have made some headline appointments – namely Murray Barnett, formerly World Rugby commercial officer as head of sponsorship operations and former Eurosport and BT Sport research specialist Matthew Roberts, as global head of research.

This is another significant shift in approach as Ecclestone held the view that the marketing of the series was the job of the teams and their sponsors. That helps to explain why there was no dedicated marketing and sponsorship unit in the Knightsbridge headquarters of Formula One management.

Besides the illumination of the brand, I expect Liberty’s strategy to be underpinned by a more proactive approach to sponsorship activation and an aggressive push on driving celebrity and athlete personality. Who knows, Kimi Raikonen’s monosyllabic, iceman persona may finally melt away.

I also anticipate that the Grand Prix weekend experience will take on a festival-type atmosphere and there will be more openness all round in the privileged environs of the Paddock and the fabulously pretentious Paddock Club.

Bernie’s motorhome – a foreboding presence in Formula One Paddocks of the past, went by the name of the Kremlin. Refreshingly, Liberty favour a more open-door policy. It is keen to talk to Formula One stakeholders who have not previously had a voice or were wary of setting foot in the Kremlin, as it seeks to improve ‘the show’.

I expect that Formula One will be re-established in the core markets and embrace the classic circuits like Monza, Spa, Hockenheim and Silverstone. The growth regions will be Latin America, the US and Asia – as opposed to the soulless spectacles we have witnessed in the Middle East, which brought in lots of dollars, but made no sense for sponsors.

Liberty see digital as “an extraordinary opportunity to engage fans in new way”. Hallelujah to that.

For sponsorship engagement experts everywhere, this seismic shift is long overdue – and presents boundless opportunity. It enables us to deliver added value for the current crop of Formula One partner/sponsors, opening up opportunities that previously did not exist.

Importantly, it also removes barriers to entry for potentially new partner/sponsors who had shied away from Formula One in the past for fear that the draconian regulations on rights particularly would eat away at their ROI.

On the technical front, the appointment by Liberty of Ross Brawn as motor sport managing director is a shrewd move. For all Brawn’s technical brilliance, he also recognises that the racing aspect needs fixing – to the benefit of fans and stakeholders.

His task will be to ensure a more even spread of income among the teams to narrow the gap between the haves and have nots. Creating a Leicester City moment in F1 would be marketing gold for Liberty.

It was not all bad under Bernie. In the 70s he took a disparate bunch of teams led by mechanics, wannabe racers and car salesman (like himself) and built a global phenomenon on the back of TV rights and lavish funding from promoters in far flung regions.

The previous owners, CVC private equity, which purchased Formula One in 2006, had left Bernie to his own devices as the revenues mounted. By 2015, the sport’s income had risen to A$2.3 billion.

But, after 40 years at the helm, and at the age 86, the times they are a-changing. His outmoded tactics resulted in dwindling broadcast reach (a drop of 250m in the last eight years), shrinking circuit attendance and disaffection among stakeholders.

Now is the time to give back to the fans, apply some marketing muscle, and consign dictatorial dysfunction to the wrecker’s yard.

Cameron Kelleher has over 20 years’ experience in Formula One as a former director of communications for the Stewart/Jaguar Formula One teams and sponsorship activation specialist across a raft of brands. He is GM of PRISMAUNZ Melbourne, part of the WPP AUNZ Group.

This all started as a rich man’s sport so a ‘Gentleman’s Club’ approach was correct at the time. It is now a Corporate showcase so the club rules are changing to include the ‘Nouveau Riche’, that’s all. The Americans are masters of marketing so all of us will feel welcome but some more than others I think.

HUBS

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